TaxTMI 
TaxTMI 
2012 (9) TMI 969
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....owing common effective grounds which are extracted hereunder:- "1. The CIT (A) erred in holding that photo copy of the sale agreement found in the course of search has no evidential value. 2. The CIT (A) erred in directing the AO to consider the cost of purchase of the property as per sale deed and ignore the purchase agreement found during the course of search. 3. The CIT (A) failed to appreciate the direct evidence found during the course of search in the vendor's residence in the shape of receipt of advances as per sale agreements and incurring of huge expenditure by the vendor immediately after sale agreement. 4. Any other ground that may be urged at the time of hearing of the appeal. 4. The Supreme Court decision relied by the CIT (A) in the case of P.R. Metrani vs. CIT (287 ITR 209) is not applicable to the facts of the case since there is a direct and circumstantial evidence in this case to show that the assessee purchased the property for the consideration as per the sale agreement entered which is found during the course of search in the residence of vendor. 5. Any other ground will be urged at the time of appeal." 3. For the sake of brevity, we deal with....
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.... 69 of the Act. The assessee being aggrieved of the assessment made, filed an appeal before CIT (A). 4. In course of hearing before the first appellate authority, it was contended on behalf of the assessee that the seized sale agreement on the basis of which the addition was made is only a photo copy and also not signed by the assessee. The original of the said agreement was neither found during search, from the premises of the assessee or from the vendor Smt. Nalini Devi and it could be found during post search investigation. The sale agreement was also not signed by the assessee and therefore an unsigned document is not enforceable in law. It was further contended that the sale agreement allegedly found during the search operation materially differ from the registered sale agreement in terms of the ownership of the land, extent of land and sale consideration. While in the photocopy of the sale agreement, there are three owners of the land, the actual owner was only Smt. R. Nalini Devi as stated in the registered sale deed. Similarly, while in the sale agreement the area of property was mentioned as 2400 sq. yards, the actual area sold as mentioned in the registered sale ....
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....he sale agreement of photocopy to Smt. R. Nalini Devi. The CIT (A) also took into note the allegation made by the assessee with regard to planting of the sale agreement in the residence of the assessee by a particular officer of the department which even though has specifically brought to the notice of the DDIT (Inv.) and the AO, no enquiry was made by them to ascertain the correctness of the allegation made by the assessee. It was also found by the CIT (A) that the assessee was never examined on oath in respect of that particular sale agreement either during the search proceedings or in course of assessment proceedings. The CIT (A) also took note of the fact that neither the DDIT (Inv.) or the AO made any attempt to controvert the averments made in the affidavit by bringing material and evidence on record. 7. The CIT (A) came to a conclusion that the AO has failed to bring sufficient material on record to satisfy himself that the transactions recorded in the photocopy of the sale agreement had been actually carried out between the parties or not. When the assessee has produced copies of the registered sale deeds indicating the actual amount of sale consideration paid towards pu....
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.... case of CIT vs. D.K. Gupta (308 ITR 230) held that in absence of corroborative or direct evidence to presume that the notings or jottings had materialised into transactions giving rise to income not disclosed in the regular books of accounts, no addition can be made. The CIT (A) taking note of the fact that the title of the land purchased by the assessee was in dispute and the land was in adverse possession, the consideration paid as per the registered sale deed could not be disbelieved and discarded in the absence of any other evidence brought on record to prove the contrary. The CIT (A) also found that the rate adopted by the AO of Rs. 7000 per sq. yard to determine the unexplained investment is not on the basis of any valid evidence or enquiry conducted in this regard. On the aforesaid finding, the CIT (A) held that the addition made u/s 69 of the Act is not sustainable in law. He therefore directed for deleting the same. 9. The learned DR justifying the addition made by the AO submitted that the photocopy of the sale agreement having been seized from the possession of the assessee, it has to be presumed that the assessee is a party to the transaction mentioned in the sale a....
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....dition on the basis of entries made in the said papers. The ld. AR relying upon a decision of the ITAT, Jabalpur Bench in the case of ACIT vs.Satya Pal Wasan (295 ITR 352 (AT)(JAB) submitted that presumption raised on the basis of a dumb document are unsustainable and cannot give rise to an addition. In this regard, the learned AR also relied upon two decision of Delhi High Court in the case of CIT vs.Kulwant Rai 281 ITR 36 and CIT vs. D.K. Gupta (308 ITR 230) and a decision of Hon'ble Supreme Court in the case of P.R. Metrani vs. CIT(287 ITR 209). The learned AR relying upon the aforesaid decision submitted that the AO having failed to bring any material or evidence to corroborate the allegation regarding receipt of on money, the presumption arrived at on the basis of the photocopy of document not signed by the assessee cannot be sustained. The learned AR relying upon a decision of Hon'ble Supreme Court in the case of K.P. Verghese vs. ITO (131 ITR 597) submitted that the revenue is duty bound to prove the payment of on money for making addition u/s 69 of the Act. The ld. AR further relied upon a decision of Hon'ble Supreme Court in the case of reported in 89 ITR 65 to submit t....
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....rly stated that the property was sold at Rs. 23.50 lakhs and not at the rate of Rs. 1.68 crores. The Hon'ble Supreme Court in the case of K.P. Verghese reported in 131 ITR 597 has held that onus is on the department to prove that the assessee has understated the value of the property and has paid more than what is mentioned in the registered sale deed. The Hon'ble Supreme Court in the case of Moosa S. Madha and Azam S. Madha vs. CIT ( 89 ITR 65) has held that photocopies have little evidentiary value. Therefore, photocopies of any document cannot by itself be considered as evidence for purpose of making addition in assessment proceedings. The AO is required to bring further evidence on record to show that the sale agreement was actually acted upon by the parties. This is because of the fact when the AO is going to make an addition, there should be sufficient evidence brought on record to support such addition. No addition can be made on conjectures and surmises. As seen from the assessment order, the AO has adopted value of the property at the Rs. 7000/- per sq. yard on the date of transaction. For adopting such a valuation, the AO has not conducted any enquiry or brought any mater....